Brokers Think They're Doing US A Favor

They are doing you a favor, the sooner you realize this the better off you will be.

 

In theory, you should be right. In practice, not so much.
Example:
Let's say it cost .67 cpm to run my truck. (Insurance, truck payment, plates, permits, Qcomm, etc)
And let's say I pay my driver .50 cpm to drive that truck.
And let's say I get 6.5 mpg.

To run 100 miles it would cost me: 1.17 (overhead and labor) x 100 = $117.00
Plus fuel (100/ 6.5=15.38 gallons)
Let's say fuel was $2.75 a gallon x 15.38= $42.30

Average week I get $2.25 a mile plus .24 cpm fuel surcharge. Total Income: $249.
Total expenses: $159.30 ($1.60 per mile to run load)
Profit on run: $89.70

Now... Fuel prices fall. OMG $1.25 a gallon cheep cheep! Shippers freak out and rates drop to levels we haven't seen in 20 years. What's really changed?

Our overhead is still .67 cpm
We still pay our driver .50 cpm
OH! Fuel went down! But we still get 6.5 mpg. So, fuel is now $1.25. We still use the same gallons, just costs $19.22.

Total cost with lower fuel: $136.22

Now, I get only $1.25 a mile off the load boards and no fuel surcharge - cuz cheap fuel right? Except it still costs me $1.37 a mile to run the load.

To take that load it would COST ME .12 cents per mile.

This is very simplified, and the overhead numbers are off the top of my head, but I hope you get the idea.

Miss E

 

Yep, I wanted to buy a Harley last year. Good thing i didn't.

 

I'm really spoiled at my carrier. cause even as bad as things are right now, I could still make a big payment on less than one weeks worth of running. I used to say I would never buy a new truck again, and keep this one till she couldn't make another mile, but here I am starting to consider putting amother new truck under my fat ###

 

Funny how people see things. I was in the afore mentioned Ontario CA truck stops Monday (tried to get in Sunday but the lots of course are full). This time last year those same lots are half empty. Parking was a breeze. Yet people ask why are rates low? Well if the amount of freight stays constant YET the amount of available trucks double guess what happens? Rates get cut in half. So why do we blame the brokers? Did the brokers double the amount of trucks at their disposal? I don't think so.

When times are good people think they will be good forever. What many of you should have been doing is saving for the bad times. Yes it's unfortunate that people will run such cheap freight. It's sad that so many will go broke. And it's a shame that this is exactly what has to happen before anything can normalize again.

When you can start finding parking at 5pm in the TA/Petro you can rest assured that the balancing process has begun. Until then all you can do is watch people lose their rears. The first sign of us seeing a light at the end of the tunnel will be when a large to mega carrier suddenly closes their doors. Don't expect a lot before then. Just my observation.

 

Don't I know that feeling brother

 

My observation is waiting for all them trucks that once hauled oilfield to go out of bussiness. Less trucks to compete with again. On another note. Oil is downn to $27-----------2003 prices again.

 

Shouldn't that tell ya something. Oil prices are directly related to the world's consumption of oil. For prices to fall that far, in such a short period of time it means nothing is being built or moved. rates are down because there is simply very little freight that needs moved.

 

Please do tell what company? ?

 

One would think that in today's age of being able to do just about anything on the interwebs that there would be a place for shippers to directly find truckers.
They could check our service rating...safety on time delivery freight claims and such.
We could check them out as well.
Then the whole transaction could take place electronically.
It would cut the broker totally out of the equation